With that, RHB likes Singapore Telecommunications (Singtel) as its preferred exposure within the sector with a 12% ESG premium incorporated – the highest within its Asean-4 telco universe.
RHB Group Research is keeping “neutral” on the local telecommunications sector for 2022 and emphasises that stock picking remains key on the back of an uneven economic recovery and extended market volatility.
The RHB research team has estimated a sector valuation of 9.5 times FY2022 EV/EBITDA, which is -1 standard deviation (SD) below its historical mean. This, the research team, believes is fair given the balance of risk and reward coupled with the low base of earnings in 2020 and 2021.
